As the demand for this risk coverage skyrockets, insurers are looking for experience and skills in handling the problem.
While insurers are watching the tiny cyber insurance coverage market spike and grow at an exponential rate, they frequently don’t have the type of skills and experience that are necessary to actually handle data breaches and hackers to be able to provide the type of service that would be required to offer this type of product.
It is becoming almost commonplace to hear about high profile data breaches among massive corporations.
Execs from companies of all sizes are becoming aware of the type of risk that can occur as a result of a digital attack and are now starting to look into cyber insurance to help to cover their risks. Recent cases such as those at Target Corp and eBay Inc. drew a great deal of notice from consumers and other businesses are now trying to protect themselves against what could happen to them if they were to suffer a similar event.
On a growing basis, corporate risk managers are starting to see cyber insurance as a necessary expense.
These experts are advising companies to choose cyber risk insurance to help to protect themselves against digital crimes that can give access to sensitive data to the wrong people. These days, the coverage is no longer being seen as a luxury but it is instead seen as a necessary part of the regular spending budget.
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The Marsh & McLennan Companies insurance broker arm has released an estimate that the cyber liability insurance market in the United States was worth about $1 billion in 2013’s gross written premiums. That said, they are also predicting that the figure could double by the end of this year.
In Europe, that market is currently a tiny fraction of what it is in the United States. Last year’s figure was an estimated $150 million. However, it is also showing a growth rate of 50 to 100 percent, says the Marsh data.
While the growth is quite fast, the cyber insurance market is still only the tiniest part of the overall industry, which is growing much more slowly, in comparison.